As you start and then grow your business, your finances should be a top priority. But the thing is: your financial needs change over time. When you first launched your company, you needed capital to get off the ground. But maybe now you’ve been operating for several years, and aren’t investing as much into the brand.
Know this: not putting enough attention on your finances could jeopardize the success of your business. Just because your business is thriving doesn’t mean there aren’t some financial questions to consider.
1. What Does My Pipeline Look Like?
Business could be booming today, but what about tomorrow? One of the biggest mistakes small business owners make is not planning for the future, particularly by marketing their products or services.
You know that being an entrepreneur is risky; at any moment, you could lose a large client, thus making a dent in your revenue. By marketing consistently, you ensure that your pipeline of business is always full.
2. What Do I Want My Business to Look Like in a Year? Five?
This is a great question to ask in order to figure out how you might need to invest in your business growth now. If you want to take a back seat in your company in the next year, you’ll need to hire someone to take on some of your responsibilities. If you want a second office, that can be a goal you have now to work toward.
Always keep your big-picture goals in mind, because they should dictate where you put your money.
3. Where Should I Invest in My Business?
You’ve been doing things the same way for so long, you’ve never even considered how your business could be improved. What would it look like if you hired your first employee? Would that allow you to spend more time on the tasks you really enjoy, like business development?
What about bigger office space? Maybe you’ve been cramped for a while, but haven’t considered seeking larger commercial space for your operations.
Also, think about equipment. If your computer takes 10 minutes to turn on and warm up, chances are you’re losing a lot of efficiency using outdated technology. This could be a great place to invest.
Continually look at your business and what could be improved. You might not be able to afford a major investment at this moment, but if you’re aware of what should be a priority, you can budget accordingly in the coming months.
4. What Financing Options Do I Have?
One fairly straightforward financing option is a business loan. But don’t just think you can take one out when you need money. When you’re in the growth stage of your business, this is also an excellent time to take out a loan to take your business to the next level.
Your financial needs will dictate the type of financing you get. For expansion or growth strategies, a small business loan is likely your best option. But if you just need a little safety net for when unexpected expenses come up (like your computer going kaput), a business credit card might do the trick.
If you’re a startup, taking on investors could be an option, but be aware that investors will own equity in your business, and may want to have a say in how it’s run.
5. What’s My Payback Plan?
If you do take out a business loan or use a credit card for business purchases, know in advance how you will pay it back. You’ll have to budget in the loan payment to your monthly expenses, so make sure you can afford to pay it.
6. What Financial Weaknesses Does My Business Have?
Do you struggle every tax season because you didn’t pay enough in quarterly taxes and now owe thousands that you can’t afford? Rather than burying your head in the sand, make a plan to rectify this situation. Work with an accountant to better forecast what you’ll need to pay quarterly, or set aside money in savings to cover the tax bill come April.
Maybe you’re terrible at remembering to update your accounting software. If your records are snarled, filing taxes will be a nightmare. Hiring an accountant is a good solution, as she can ensure that your bills get paid and clients get invoiced, as well as make sure that your expenses are properly categorized to help with tax filing.
Being an entrepreneur is not a static operation; it’s constantly in flux, and it’s important that you continually keep an eye on the overall financial health of your company to ensure that it’s thriving.